Tuesday, March 28, 2017

Okay, Everyone Line Up Behind Kevin Brady for the BAT . . . Guys? Guys? Where is Everyone???

So what happened last week, and how does the crushing defeat in healthcare reform legislation affect the BAT?

Last week. we witnessed what happens in a political vacuum where the leaders are weakened, and the governing coalition (so to speak) has little incentive to bargain or cooperate.  And in this case, the legislation was poorly-conceived and unpopular.  It's really that simple, and you saw the predicted fracturing of the House Republicans.  The implications for the anti-BAT folks are excellent.

The failure of the Republicans to even take a vote on the TrumpCare legislation tells you a lot.  I do not believe the modest projected shortfall in votes.  The media says there were about 30-odd holdouts, but I think without a vote, we will never know.  I personally believe that it would have been very hard for rank-and-file moderates to vote for this legislation, or anyone for that matter. Even committee votes are now fodder for midterm campaigns.  Who would want to put their name on a bill that removes insurance from a staggering 24 million people?

This speaks to the amazing political miscalculations made by Paul Ryan and presumably his sidekick, the estimable Kevin Brady.  They seemed to believe that by shamelessly cozying up to Mr. Trump, they would achieve two things:  (a) benefit from his political pull based on his November election victory and (b) neutralize the effort by conservatives to oppose the bill.  They must have believed that the conservatives would never dare vote against something supported by  Trump.


So why did the conservatives take this hard stance against the conservative Mr. Trump?  I personally think it was a power grab.  Now they can call the shots in future battles by staying united.  Of course, you also have to consider that Mr. Trump has managed to achieve a lower approval rating in 64 days than Obama did in eight years as President. Trump is sinking deeper into the abyss by the day.

Trump clearly had no idea how to build a coalition or hold one together, and it turns out that bullying is not the winning approach.  Why?  Two reasons:  first, Trump's bargaining position was contingent on being able to deliver something in exchange for votes.  Clearly, he cannot do that, so why would anyone trade with him?  If Trump can't keep his promises because he has no way to deliver, he loses all bargaining authority.  Second, Trump is not trustworthy.  He clearly coaxed Paul Ryan to come to his side and ally with him, and then when it didn't work out, he threw him under the bus. So who will trust him when you know this is possible?

No one.

This leaves Paul Ryan wounded.  He looks like a policy wonk who isn't accountable for delivering votes.  His legislative strategy was paper thin and poorly conceived, putting his Republican colleagues at tremendous risk.  He said he was excited about the CBO report.  Need I say more?

Trump and Ryan need a big win now to encourage folks to believe they can lead and deliver results. Given the above, it's hard to believe anyone will follow them if any risk is involved.

The Border Adjustment Tax proposal has everything going against it now.  The law favors massive companies over family businesses, and is highly inflationary.  It also constitutes a massive tax hike (face it), and involves a big gamble on macro economics that have never been tried before. Anywhere. No one knows if it will work.  The arguments made to support the BAT involved obvious mischaracterizations and at times, outright lies.  Ryan and Brady haven't fooled anyone.  And finally, the proposal has been highly controversial and risky from day one, having split the business community down the middle.

Ryan and Brady blew healthcare in part because they spent so much political capital on this loser idea.  They were on TV endlessly for two months straight plugging this terrible idea and brushing off complaints all the while saying that they were listening.  As recently as last week, Brady robotically reaffirmed on TV that it was a "given" that the BAT would be part of the tax reform bill. He knows perfectly well that the BAT won't get through the Senate and yet he remains committed to insisting that his Republican colleagues take HUGE political risks in voting for this very unpopular proposal.

Either Ryan and Brady have a learning disability, or they must be considering alternatives.  In the wake of the healthcare debacle, they can't take risks, and will NEVER be able to sell a bill of goods again.  The dull thud of the healthcare failure is a sound no one will listen to again.

The Republicans have a strong incentive to show they can get something, anything, done now.   Having staked themselves to tax reform as their next big challenge, they MUST drop the BAT and concentrate their limited remaining resources on something that will pass.  The BAT will inevitably fail, and if Brady and Ryan push it to the limit, they will go down the drain with it.

Life is full of choices . . . .


  1. Richard,
    I hope you're right about this. Ryan & Brady seem to have less learning ability than a flatworm (which at least will move away from pain). My worry is that they double down on stupid, b/c that's all they know how to do. However, comments by various senators (Cotton, et al) have heartened me. From your keyboard to God's ears.